AI adoption on the rise among SMEs but governance and skills lag behind

SMEs across New Zealand are outpacing many global counterparts in their adoption of artificial intelligence (AI), reaping significant benefits to revenue and productivity. However, new research also highlights critical challenges around governance, workforce readiness, and sustainable AI integration.

New insights from Salesforce’s Small & Medium Business Trends report reveal that 82 percent of Kiwi SMEs are experimenting with or actively using AI tools – well above the global average of 75 percent and APAC’s 63 percent. Among those implementing AI, an overwhelming 95 percent report increased earnings, particularly through optimising marketing campaigns, customer service automation, and personalised recommendations.

Adrian Towsey, Salesforce’s Area Vice President for Emerging SMBs in Australia & New Zealand, notes the tangible results already being achieved.

“Small to medium businesses across New Zealand are reporting overwhelmingly positive results from their early adoption of AI. Business leaders who have seized on early AI use cases – such as marketing optimisation and customer service – are scaling faster, with improved operating margins,” says Towsey.

Local optimism remains high, with 74 percent of SME leaders expressing confidence in their futures as AI adoption ramps up, surpassing the APAC average of 70 percent. Yet, keeping up with technological advancements remains a key challenge, with 70 percent of leaders acknowledging the difficulty of staying abreast of rapidly evolving tools.

Despite the early enthusiasm, a Deloitte report – AI at a Crossroads: Building Trust as the Path to Scale – underscores the urgent need for robust AI governance structures to manage risk and build trust. The report, based on a survey of senior leaders across Asia-Pacific, including New Zealand, highlights that less than 10 percent of organisations have mature AI governance frameworks in place.

In New Zealand, the top concerns associated with AI use are reliability and errors (87 percent), security vulnerabilities (85 percent), and privacy issues (85 percent).

Amy Dove, Trustworthy AI Lead Partner at Deloitte New Zealand, believes these risks are manageable, but only with intentional efforts.

“We’re seeing real concerns around the risks associated with AI, but we also know that these risks can be managed with people, process and technology so that New Zealand businesses and organisations can reap the benefits of AI safely and responsibly,” says Dove.

While 53 percent of local organisations provide systems for employees to raise AI-related concerns, skills gaps persist. Less than half of employees are confident in using AI tools ethically and legally, and nearly two-thirds of organisations are turning to third-party partnerships to close the capability gap.

The stakes are high. Businesses with mature AI governance frameworks report a 28 percent increase in staff adoption of AI solutions and experience nearly 5 percent higher revenue growth compared to those with weaker governance structures.

Microsoft’s latest report, From Hype to Habit: Exploring the Value of Generative AI at Work, reveals that 98 percent of Kiwi businesses are now using AI tools, a figure that signals near-universal adoption. However, the report also raises a red flag: 39 percent of organisations have adopted a “use it or lose it” policy for AI tools. Under this approach, employees face pressure to demonstrate rapid ROI or risk losing access to licences, which are often reallocated elsewhere.

Lucy Debono, Microsoft’s Modern Work Business Group Leader for ANZ, warns that such policies may backfire, slowing long-term progress.

“With AI fast becoming fundamental to our way of working, these organisations (and New Zealand in general) risk falling behind competitors who are successfully adopting AI.”

The report stresses that businesses achieving measurable ROI are those investing in workforce enablement and fostering a culture of AI literacy to ensure tools are used effectively and sustainably.

As AI accelerates its foothold among New Zealand’s SMEs, the research points to a dual challenge: Driving adoption while ensuring trust, governance, and capability keep pace. Businesses that can strike this balance stand to unlock significant operational and revenue benefits, while laggards risk falling behind both domestically and internationally.

Towsey sums it up. “By using AI and autonomous agents to create personalised content and provide improved service, SMEs can improve the customer experience and build trust.”